Indonesian forests constitute one of the world’s megacenters of biological diversity. However, these forests — 10 percent of the world’s remaining tropical forests, second largest to Brazil — are being increasingly degraded, leaving ever fewer natural resources and causing significant ecological damage.

Protected areas are diminishing in conservation value as poorly planned and unsustainable development leads to poaching, encroachment, habitat fragmentation and forest fires.

These problems have been building for years with the rapid and largely unregulated exploitation of forests and other natural resources under the New Order regime. Since the early days of the regime at the end of the 1960s until today, Indonesian forests have been a prominent powerhouse of the country’s economy, after oil and textiles.

Unfortunately, to fill the need for economic growth and alleviating poverty, the government seemingly still sets its development agenda based on forest exploitation, including conversion of forests into plantations.

Forest conversion, which was defined as a continuous process of declining forest functions, has led to man-made monocultures characterized by the almost complete loss of forest ecological functions and socioeconomic benefits for local people.

In general, 60 percent of the conversion of tropical forests in Indonesia is due to the development of oil palm plantations (WWF, 2002). However, only 30 percent to 40 percent of forest areas that have been logged were later developed into oil palm plantations in the last decades in Indonesia.

This phenomenon has contributed to an alarming rate of deforestation (2.1 million hectares per year according to the Ministry of Forestry, 2003). Recent assessments estimate that by 2005 lowland forests will disappear in Sumatra and by 2010 in Kalimantan. If the incidents of forest fires are included, this prediction may well be true. The usual practice of plantations to log and then burn to clear the land for planting has worsened the impact.

The question now is whether forest conversion has increased the level of wealth of the country, if not the welfare of the people. One study shows that as a result of deforestation through 2002, Indonesia has lost about US$25 billion from timber and may continuously lose about US$0.55 billion per annum.

Other findings also show that conversion comes with severe environmental and social costs. These include the loss of high-conservation-value forests, human-wildlife conflicts (in Riau, the cost of human-elephant conflicts have reached Rp 1.3 billion per year, or 86 percent of Riau’s 2002 provincial budget), massive forest fires, the loss of ecosystem functions and services and disregard for the rights and interests of indigenous communities or forest-dependent people.

Although the country’s earnings from palm oil exports have increased, unfortunately, profits from forest conversion only go to a few people within and outside the country. On the other hand, forest-dependent people and the majority of Indonesians are yet to benefit from conversion.

Another issue to be raised is whether we have to stop developing the oil palm sector. Although concerns about massive impacts resulting from oil palm development have increased, many environmental organizations (ENGOs), including the WWF, recognize the need of countries like Indonesia and Malaysia to develop and provide for their people.

Therefore, while seeking to ensure that important high-conservation-value forests (HCVFs) do not disappear, some ENGOs have been trying to open a dialog with the palm oil industry to search for sustainable solutions. For instance, the WWF network has been opening a dialog with Migros (Swiss retailers), Unilever, ABN-Amro Bank, the Malaysian Palm Oil Association and the Indonesian Palm Oil Producers Association (GAPKI).

One area that is being carefully looked at is good land use planning that incorporates the need for oil palm development as well as HCVF conservation. If we analyze the figures of the areas that have already been opened, 60 percent to 70 percent have not been utilized as oil palm plantations.

This means that a huge figure (3 million to 4 million hectares) of abandoned land, wastelands or land with absentee ownerships is available to be used at this particular point of time and in the future. Integrated and coordinated land use planning at different levels (district to national), in this case, is extremely necessary.

Another important solution being discussed between ENGOs and companies is the implementation of several better practices for sustainable palm oil production. These practices cover guidelines on protecting, maintaining and restoring HCVFs within plantation areas; mitigating human-wildlife conflict; resolving social and tenurial conflicts; adopting a zero burning policy; implementing integrated pest management; and managing waste.

The coming Roundtable Discussion on Sustainable Palm Oil in August 2003 in Kuala Lumpur, incorporating key actors in the entire chain of the oil palm sector and other interested parties, will be used as a starting point to have sustainable produced palm oil that balances economic and environmental aspects.

Some key Malaysian companies such as Golden Hope Plantation Bhd has seen this as a good opportunity to enter markets in the developed world. If the Indonesian industry does not recognize this potential, it may lose a significant market share in Europe to competitors. And for the rest of us, we may end up experiencing more disasters as a result of ongoing deforestation.

Fitrian A. holds a master’s degree in environmental management and development from the Australian National University. Israr Ardiansyah graduated from Gadjah Mada University’s School of Forestry. Both work for WWF Indonesia-Forest Program.